Gov. Pat Quinn on Thursday drew a hard line on negotiations with hospitals about how much free care they must provide to qualify for tax breaks, a contentious issue that has the state’s nonprofit hospitals on edge.

After talks between hospital and Illinois officials reached an impasse Wednesday, the governor lifted a moratorium on the state’s review of property tax exemptions sought by nonprofit hospitals for providing charity care.

The move clears the way for the Department of Revenue to resume conducting reviews on pending applications filed by as many as 18 nonprofit hospitals seeking property tax exemptions, a process Quinn halted in October after hospital groups complained that the process was flawed.

The governor’s decision comes after a group of hospitals and government administrators failed by his March 1 deadline to come to terms on new rules that determine how the state weighs whether nonprofit hospitals should pay property taxes.

I don’t think the hospitals anticipated that Quinn would lift the moratorium. Instead, there seemed to be a feeling that the talks would continue while legislation started to move through the system. The hospitals lined up Senate Majority Leader James Clayborne to sponsor their own proposal as the clocked ticked down on the negotiations deadline. But that move didn’t really intimidate anyone because Clayborne isn’t as powerful as some casual observers think. From the Illinois Hospital Association’s press release…

(W)e are extremely concerned that the Department of Revenue has been instructed to resume its decision-making process on hospital property tax-exemptions. The issuance of further rulings would be a distraction from the work that needs to be accomplished in developing a legislative solution over the next three months of the General Assembly’s spring session.

I don’t think it’ll be a distraction to anybody. More likely, it’ll focus their minds.

* I’m not sure I agree with most of the Trib’s editorial today because it’s my own personal opinion that property tax exemptions in exchange for charity care means that the charity should be a whole lot more than taking credit for paper losses. But I do concur with this…

The hospitals didn’t help their cause by failing to reach an agreement on charity care. Quinn is right to hike the pressure by restarting the reviews of their tax status. If they’re going to get a tax break, they should show they have earned it.

So let me get this straight. Hospitals and doctors who practice in partnership with hospitals are already facing Medicare and Medicaid reimbursement cuts. The state can’t pay it’s bills. Now the Quinn administration wants to hold their feet further to the fire. Yeah, okay. All over property taxes receipts. Remember - there’s nothing stopping hospitals from not accepting beneficiaries on Medicare, Medicaid or state insurance.

Hospitals are not the only not-for-profits that will be responsible for paying property taxes. There are other not-for-profits struggling to survive due to cuts in funding and delays in payment that are forced to pay the Department of Revenue for property taxes. The defintion of charity is pretty fuzzy.

Not accepting Medicaid and pushing back on stringent charity care requirement is not “closing your doors to the poor”. It’s not like hospitals are refusing to accept “poor” patients. The Attorney General requires hospitals and physicians’ groups to accept “reasonable” payments. Hospitals, doctor’s offices and clinics can still offer charity and reduced-cost care. And to some this may be callous, but where would “poor” patients go if they live in a small area with only one hospital within 25+ miles? This all goes to the larger debate about the future of Medicaid and Medicare as a whole, but that’s not quite what we are discussing.

I think this action brings clarity to the issue for both sides. I don’t know how far apart the parties were but I think they will find that agreement will be much easier to reach now. I also think it interesting that most of those commenting find the hospitals to be the bad guys in this. I think the issue is far more complex. Some are undoubtedly under-serving while others do indeed have trouble making ends meet with the number of charity cases they do serve. And it is not so simple as to just say let’s count those who ask for assistance. Many individuals don’t ask for help, they just don’t/can’t pay their bills and the hospital has to write that business off. It is my understanding that this group is not counted towards the charity number. Perhaps some percentage of them should be.